Australia Raising the minimum wage by 2.4% will negatively impact its economy - it's a matter of applying a little common sense. Consumers and businesses alike will only bear so much of a cost burden and increase before buying habits change. Business will always make its money. That leaves the consumer. Just how much will people pay for an already overpriced burger?
First of all I have to agree with the no voters in the sense that it wont have a large impact, however like any other minimum wage increase it will only serve as additional incentive for people looking to hire new workers to either use machines to replace the work low paid people would have done or to add more work to the people that are already hired.
No, Australia's recent minimum wage increase will not harm the economy. It is important to remember that this question does not concern the overall debate over minimum wage. The recent increase should not be a means for interrogating the the merits of the minimum wage in Australia. If the rest of the world is to understand the impact of the increase, everyone must accept the 2.4 percent increase for what it is: negligeable.
I believe that raising the minimum wage will be good for Australia's economy. The lower classes will have more money to spend on basic necessities, and will be able to spend more and put more money into the economy. Raising the minimum wage by only 2.4% will also not cause huge amounts of unhealthy inflation.
Back before the central banks took over monetary policy of the world, any amount of wage inflation would certainly set off negative consequences to the economy. However, the economy is already so badly run due to poor central management, Australia is unlikely to see any serious negative repercussions to the minimum wage being raised. In many parts of the world the minimum wage is falling behind inflation because countries are printing too much currency. The issue is that without tackling monetary policy, you can't help the people who actually need it.